Kinross Gold Corporation · TSX:K
Kinross Gold — Q3 2016 Earnings Presentation
26 slides from Kinross Gold's earnings presentation, Nov 3, 2016
Slide 1: Kinross Gold Corporation Q3 2016 Results Conference Call & Webcast
November 3 KINROSS GOLD CORPORATION 2016 Q3 2016 Results Conference Call & Webcast 11 www.kinross.com
Slide 2: Cautionary Statement on Forward-Looking Information
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION All statements, other than statements of historical fact, contained or incorporated by reference in or made in giving this presentation and responses to questions, including but not limited to any information as to the future performance of Kinross
Slide 3: Q3 2016 Results Highlights
Q3 2016 Results Highlights 33 www.kinross.com
Slide 4: Delivering Operational Excellence
THIRD QUARTER 2016 HIGHLIGHTS DELIVERING OPERATIONAL EXCELLENCE Continued strong performance from mines in the U.S. and Russia, and resolved challenges at Bald Mountain, Chirano and Tasiast during the quarter FORT KNOX BALD MOUNTAIN • Increased production and lower costs from Q2 • Continued operatio
Slide 5: Robust Financial Results
THIRD QUARTER 2016 HIGHLIGHTS ROBUST FINANCIAL RESULTS Generated strong cash flow and earnings during the quarter Operating Cash Flow Free Cash Flow* Net Earnings $ millions $ millions $ millions Net operating cash flow Net earnings Adjusted operating cash flow (1) $112 Adjusted net earnings (1) $12
Slide 6: Advancing Our Projects
ATTRACTIVE GROWTH OPPORTUNITIES ADVANCING OUR PROJECTS Organic projects spanning all 3 of our operating regions offer opportunities to expand production or extend mine life at our operations Q2 2018 Q1 2018 Tasiast Phase 1 Full production Q4 2017 Moroshka Production expected to commence H1 Q3 2017 L
Slide 7: Bald Mountain
ATTRACTIVE GROWTH OPPORTUNITIES BALD MOUNTAIN Developing near-term opportunities which are expected to double mineral reserve estimates by end of Q1 2017 • Record of Decision in August a major milestone for future growth and expansion at Bald Mountain NORTH AREA • Opens up new near-term mining oppor
Slide 8: Round Mountain Phase W
ATTRACTIVE GROWTH OPPORTUNITIES ROUND MOUNTAIN PHASE W Phase W a low-risk option to extend mine life estimates at one of our best-run U.S. mines • Declared a new Inferred mineral resource of 2.4Moz. for Phase W in June 2016(2,3) • Phase W scoping study results encouraging Focused on a 1.3Moz. port
Slide 9: La Coipa Phase 7
ATTRACTIVE GROWTH OPPORTUNITIES LA COIPA PHASE 7 Advancing permitting and exploration activities at the La Coipa Phase 7 project • Pre-feasibility study on La Coipa completed during Q3 2015 • Continue to advance permitting Received approval on the project DIA (Declaration of Impact to Environment)
Slide 10: Russia Satellite Deposits
ATTRACTIVE GROWTH OPPORTUNITIES RUSSIA SATELLITE DEPOSITS Advancing development of satellite deposits located near Kupol and Dvoinoye September North East Moroshka • Located approximately 15 km from Dvoinoye • Located 4 km from the Kupol mill • Near-surface, high-grade M&I mineral resource • Complet
Slide 11: Tasiast Two-Phased Expansion
ATTRACTIVE GROWTH OPPORTUNITIES TASIAST TWO-PHASED EXPANSION Phase One expected to reduce Tasiast’s cost per ounce by ~50% and to increase annual production by ~90% Phase One progressing well • On track to reach full production in Q2 2018 • Engineering ~80% complete • Procurement for long-lead packa
Slide 12: Financial Results Highlights
Financial Results Highlights 1212 www.kinross.com
Slide 13: Financial Results
THIRD QUARTER 2016 HIGHLIGHTS FINANCIAL RESULTS Q3 2015 Q3 2016 YTD 2015 YTD 2016 Attributable gold equivalent ounces (oz.)(5) Produced 680,679 684,129 1,970,937 2,042,859 Sold 715,648 674,070 1,976,459 2,020,219 Average realized gold price ($/oz.) $1,122 $1,336 $1,175 $1,261 Production cost of sale
Slide 14: Guidance Update
2016 OUTLOOK GUIDANCE UPDATE(8) • MAINTAINING guidance for production, cost of sales and all-in sustaining cost • LOWERING guidance for capital expenditures Now expecting 2016 capital expenditures to be $650 to $675 million Primarily as a result of Tasiast Phase One capital that is now expected
Slide 15: Non-Cash Impairment
THIRD QUARTER RESULTS NON-CASH IMPAIRMENT Suspended mining and crushing operations at Maricunga in August • Recorded a $139M non-cash impairment charge at Maricunga during Q3 2016: $68M related to property, plant and equipment $71M related to inventory • We continue to believe Maricunga retains
Slide 16: Solid Financial Position $2.2B
STRONG BALANCE SHEET SOLID FINANCIAL POSITION Maintaining balance sheet strength & financial flexibility remain priority objectives LIQUIDITY POSITION MAINTAINING FINANCIAL FLEXIBILITY • Repaid $250M senior notes in September • Extended maturity dates of the $500M term loan and $1.5B credit facility
Slide 17: Operating Highlights
Operating Highlights 1717 www.kinross.com
Slide 18: Diversified Portfolio of Operating Mines
OPERATIONAL EXCELLENCE DIVERSIFIED PORTFOLIO OF OPERATING MINES Over RUSSIA 60% of estimated 2016 gold equivalent production from mines located in the Americas AMERICAS AMERICAS Dvoinoye Kupol Fort Knox RUSSIA Kettle River-Buckhorn Bald Mountain Round Mountain 2016E GOLD EQUIVALENT PRODUCTION(5,8) T
Slide 19: Americas
THIRD QUARTER 2016 HIGHLIGHTS AMERICAS • Strong performance at FORT KNOX and • MARICUNGA production lower as mine ROUND MOUNTAIN placed into suspension in August • KETTLE-RIVER BUCKHORN production now • PARACATU production impacted by a 16-day expected to extend into Q1 2017 curtailment due to lack
Slide 20: Russia
THIRD QUARTER 2016 HIGHLIGHTS RUSSIA KUPOL-DVOINOYE • Consistent, strong performance from Russian operations continued in Q3 2016 • Processed approximately 71,000 gold equivalent ounces from Dvoinoye ore • Grades were slightly lower due to planned mine sequencing • Construction of a filter cake plan
Slide 21: West Africa
THIRD QUARTER 2016 HIGHLIGHTS WEST AFRICA • TASIAST resumed normal mining and processing operations in August Averaging strong mill throughput of 8,000 t/d New 3-year collective labour agreement signed in early October • Strong performance at CHIRANO as production and costs improved significantl
Slide 22: Principles for Building Value
OPERATIONAL EXCELLENCE QUALITY OVER QUANTITY DISCIPLINED CAPITAL ALLOCATION BALANCE SHEET STRENGTH Principles for Building Value www.kinross.com 2222
Slide 23: Building Momentum for the Future
2020E Start-up of potential 2018E TASIAST PHASE TWO TASIAST PHASE 2017E ONE expected to ramp up to full 2016E Stronger year production expected at Expecting to BALD MOUNTAIN deliver HIGHER production Building Momentum for the Future 2323 www.kinross.com
Slide 24: Appendix
APPENDIX 24 24 www.kinross.com Q3 Results
Slide 25: Endnotes
ENDNOTES 1) Adjusted net earnings attributable to common shareholders and adjusted operating cash flow are non-GAAP financial measures. For more information and a reconciliation of these non-GAAP measures for the three and nine months ended September 30, 2016 and 2015, please refer to the news relea
Slide 26: Kinross Gold Corporation
KINROSS GOLD CORPORATION 25 York Street, 17th Floor │Toronto, ON │ M5J 2V5 www.kinross.com 2626 www.kinross.com